Article 12. Termination of Employer and Employee Participation

Section 12.01 General Scope

  This Article sets forth the basis for terminating an Employer’s participation in the Plan and the effect of such termination on the Participants who are employed by such Employer.

  In no event shall the termination of any Employer under this Article 12 result in an impermissible reduction or forfeiture of Accrued Benefits under Section 411 of the Code or 204 of ERISA and the regulations thereunder.  Furthermore, notwithstanding any provision to the contrary, nothing in this Article 12 shall be construed to limit or modify the Employer’s liability for its failure to make contributions to the Plan prior to an Employer’s termination or prior to the termination of coverage under the Plan of one or more classes of Employees, or to limit or modify any liability of the Employer under Title IV, Subtitle E, Part 1 of ERISA. 

Section 12.02 Termination and Modification of Contribution Obligations

(a)               Introduction

The financing of benefits provided by the Plan is based on the continued contributions of Employers, as required by the Collective Bargaining Agreements or other similar agreements, as well as the Plan and Trust Agreement.  Therefore, the failure of an Employer to make required contributions to the Plan, as well as certain other events, may jeopardize the actuarial soundness of the Plan.

(b)               Termination of Status as a Contributing Employer

The Trustees may, in their sole discretion, terminate an Employer’s status as a Contributing Employer in the event that: 

(1)               a Contributing Employer ceases to make contributions to the Fund at any time after its Contribution Date in violation of its Collective Bargaining Agreement, other agreement and/or the terms of the Plan and Trust Agreement;

(2)               the number of Employees employed by the Contributing Employer at any time shall be less than 50 percent of the number of Employees employed by the Contributing Employer on its Contribution Date;

(3)               the Contributing Employer enters into a Collective Bargaining Agreement or other agreement requiring contributions to the Fund, and then fails to renew such agreement, or enters into a Collective Bargaining Agreement or other agreement which does not require the continuation of contributions to the Fund, or requires contributions at a reduced Contribution Rate; or

(4)               the Contributing Employer fails to contribute at such minimum Contribution Rate as the Trustees may impose in order to preserve the actuarial soundness of the Fund and to adequately fund benefits provided under the Plan.

(5)        the Contributing Employer fails to make any increase in contributions as the Trustees may require in order to preserve the actuarial soundness of the Fund and to fund adequately benefits provided under the Plan

(c)               Effect of Termination

(1)               In the event that an Employer’s status as a Contributing Employer is terminated, then:

(A)        notwithstanding any provision to the contrary in any Collective Bargaining Agreement or other similar agreement to which the Employer is a party, the Employer shall cease to maintain the Plan and shall cease to have any obligation to contribute under the Plan for work performed after the date of the Employer’s termination as a Contributing Employer;

(B)        any person employed by such former Employer shall cease to be a Covered Employee and shall cease to accrue any Pension Credit under Article 4 of the Plan with respect to work performed for the former Employer after the former Employer’s termination date; and

(C)        all Hours of Work and Contribution Hours with the former Employer after the former Employer’s termination date shall be disregarded.

Notwithstanding any provision to the contrary, a Participant’s Accrued Benefit shall not be any less than it was on the date immediately preceding the date on which the former Employer was terminated as a Contributing Employer.

(2)               In the event it is determined by a court of competent jurisdiction, or other forum of competent jurisdiction, such as the American Arbitration Association, that an Employer’s obligation to contribute under the plan has not ceased, then:

(A)        the Employer’s status as Contributing Employer shall be retroactively reinstated (as of the termination date or such later date specified by the court, federal agency or other forum of competent jurisdiction);

(B)        any Pension Credit that would otherwise have been credited to a Participant pursuant to Article 4 of the Plan had the Employer not been terminated shall be retroactively credited to the Participant as of the reinstatement date;

(C)        any Hours of Work and Contribution Hours that were disregarded pursuant to subsection (c)(1) above shall be retroactively credited to a Participant (as of the reinstatement date) in accordance with the terms of the Plan, except to the extent that Years of Service may be disregarded pursuant to Section 411(a)(4)(G)(i)(II) of the Code; and

(D)        the Employer shall make any contributions it was obligated to make during its termination period, plus interest (determined by using the rate prescribed under Section 6621 of the Code).

(d)               Termination of Coverage of One or More Classes of Employees

(1)               The Trustees may, in their sole discretion, terminate the coverage under the Plan of one or more classes of Employees, in lieu of terminating the Employer’s status as a Contributing Employer, upon the occurrence of any event described in subsection (b) above.

(2)               In the event that the coverage under the Plan of one or more classes of Employees is terminated, then the Employer’s obligation to contribute under the Plan for such class or classes of Employees shall cease with respect to work performed by such class or classes of Employees after their termination of coverage under the Plan, but the Employer shall remain obligated to contribute under the Plan for such other class or classes of Employees who continue to be covered under the Plan.  Any person included in such terminated class or classes of Employees shall cease to be a Covered Employee, and any work performed for an Employer by such an employee after coverage under the Plan has been terminated shall be treated as work performed in Non-Covered Employment.  Therefore, no Pension Credit shall be granted under Article 4 of the Plan for any work performed by a class of employees whose coverage under the Plan has been terminated.  Any Hours of Work in Continuous Non-Covered Employment shall be taken into account in accordance with the terms of the Plan, except that Years of Service may be disregarded for vesting purposes pursuant to Section 411(a)(4)(G)(i)(II) of the Code.

(3)               Notwithstanding any provision to the contrary, a Participant’s Accrued Benefit shall not be any less than it was on the date immediately preceding the date on which his coverage under the Plan was terminated.

(4)               If it is determined by a court of competent jurisdiction, or other appropriate forum that the employer’s obligation to contribute on behalf of a terminated class of Employees has not ceased, the coverage under the Plan of such class of Employees shall be retroactively restored, along with any Pension Credit that would have been credited to a Participant had his coverage under the Plan not been terminated, and the Employer shall be obligated to make retroactive contributions on behalf of the class of Employees for any work performed during the termination period, plus interest (determined by using the rate prescribed under Section 6621 of the Code).

Section 12.03 Termination Due to Noncompliance with the Code, ERISA or Participation Rules

(a)               In the event that a Contributing Employer fails to comply with any requirements of the Code, ERISA, or participation rules established by the Trustees, and the Employer fails to correct such non-compliance to the full satisfaction of the Trustees, the Trustees may, in their sole discretion, terminate the coverage under the Plan of one or more classes of Employees, if the non-compliance only relates to such class or classes of Employees.

(b)               If the Employer’s status as a Contributing Employer is terminated due to non-compliance, the Employer shall cease to maintain the Plan and shall cease to have any obligation to contribute under the Plan for work performed after the date of the Employer’s termination as a Contributing Employer, and the provisions of Section 12.02(c) shall apply to the Employer and the Participants employed by such Employer.

(c)               If the coverage under the Plan of one or more classes of Employees is terminated pursuant to this Section 12.03, the Employer’s obligation to contribute under the Plan for such class or classes of Employees shall cease with respect to work performed by such class or classes of Employees after their termination of coverage under the Plan, but the Employer shall remain obligated to contribute under the Plan for such other class or classes of Employees who continue to be covered under the Plan.  In such event, the provisions of Sections 12.02(d)(2), (3) and (4) shall apply to the Employer and any person included in the class of Employees whose coverage under the Plan has been terminated pursuant to this Section 12.03.

Section 12.04 Withdrawal of Employer

Notwithstanding any other provision to the contrary, an Employer’s status as a Contributing Employer shall automatically terminate whenever the Employer has a complete withdrawal (within the meaning of Section 4203 of ERISA), whether or not such complete withdrawal results from the Employer’s termination as a Contributing Employer pursuant to this Article 12.  When an Employer has a complete or partial withdrawal, the Employer shall be liable to the Plan for the amount of withdrawal liability determined under Title IV, Subtitle E, Part 1 of ERISA, subject to the terms and conditions set forth in the document that is approved by the Trustees and that specifies the procedure for determining such withdrawal liability, which document is incorporated by reference herein and forms a part of the Plan.